Democracy comes to credit cards

I’ve just set up an account with Google checkout and also with Square. For years, I’ve been using Kagi to handle orders for various software products I’ve developed, notably QuickMP3 and RiddleMeThis. I also give away a bunch of stuff on my website, including tools that people are using for commercial projects, such as Particle Accelerator and Alphaville — which I give away because the hassle of setting up registration systems and the like outweighs any revenue I’d get from them, and — if I’m not going to make any money anyway — I’d rather people use stuff I’ve written than not.

My experiences with Kagi have generally been good. Great even. But their prices seem to keep going up while alternatives (such as Paypal) are cheaper, and also more convenient. RiddleMeThis tends to sell in fits and gasps; it’s pretty irksome to be charged money by Kagi even when I’m not selling anything (but the alternative is to give Kagi an even bigger slice of each sale).

Bottom line: Kagi’s rock bottom cost is 5% (there’s also a minimum charge, but it’s hard to find on their website right now), Google’s price is 1.9% + $0.30. Square and Paypal are a little more expensive. Back when I was selling a $5 product (QuickMP3) Kagi was charging me over $1 per sale.

The really interesting thing about both Google, Square, and (of course) Paypal is that they all operate both ways. Each account lets you buy and sell goods, or simply move money around. Take a common situation we’re all familiar with — splitting a check at a restaurant. The old model: restaurant won’t split your check and not everyone has cash, so someone pays with plastic and everyone gives that person cash or “will pay them back”. The new model: anyone can split the check by accepting credit card payments from the other people at the table. (It may not be socially acceptable to suggest this right now, but it’s perfectly feasible technically.) Square even provides you with a (free) widget for swiping other people’s credit cards.